Tullow Sinks into Red but Confident Africa Strategy Will Pay Off
LONDON, July 30 (Reuters) – Tullow Oil Plc drifted into the red after writing off more than $400 million in exploration costs but the Africa-focused explorer remained confident that its strategy will pay off.
A disappointing run of oil wells exploration in Mauritania, Ethiopia and Norway over the past six months translated into a half-year net loss of $95 million because of $402 million in writeoffs.
The British energy company is counting on drilling projects in Kenya and Ethiopia this year and next to improve its exploration performance.
"Exploration is a risky business... You have periods where you don't find oil and if you keep at it over a period of three to five years you generally have the success that we've had, so we are not overly concerned," Chief Executive Aidan Heavey told Reuters.
"Our basic strategy is to find around 200 million barrels of oil a year and we've done that very successfully over the last seven years and we are pretty confident we'll do it long term."
Tullow has had 14 successful well results and eight dry holes so far this year, mostly in East Africa, exploration director Angus McCoss said.
In Kenya, Tullow has made oil discoveries in 9 of 11 wells in the Lokichar basin where it has raised discovered resources to 600 million barrels of oil. It plans to drill wells in three new onshore basins in the East African country.
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